HomeGoldRestructuring efforts on track for South African gold major

Restructuring efforts on track for South African gold major

The company has taken recent steps to stem unsustainable losses at some of its operations which include the sale of some South African assets. Proceeds from these sales have been earmarked for debt reduction.

AngloGold Ashanti will also place loss-making South African operations on care and maintenance, and is investing in a slate of high return and low capital Brownfields projects in its international portfolio to extend mine lives and improve margins.

These projects remain on schedule and on budget.

The company announced in October the $300 million sale of its Moab Khotsong mine and related assets to Harmony Gold Mining Co. and also the sale of its Kopanang mine and West Gold Plant to Heaven-Sent SA Sunshine Investment Company, which controls the local Village Main Reef operation, for R100 million.

The sales remain subject to certain conditions precedent. Once these sales are complete, and the loss-making TauTona mine is placed on care and maintenance, an estimated 13% of the AngloGold Ashanti’s total production will come from its remaining operations in South Africa.

These announcements were made as part of AngloGold Ashanti’s Q3 production results where it also announced that it had generated free cash flows of $88 million for the period.

It also remains on track to meet its full-year guidance.

Third-quarter all-in sustaining costs (AISC) were unchanged from the same period a year ago at $1 071/oz, despite inflationary pressure, planned higher capital reinvestment expenditures and stronger currencies.

Production of 997 000 oz during the quarter was 11% higher than the same period a year earlier, and was 9% higher than the previous quarter this year.

“Our strong production performance resulted in good free cash flow generation, despite our planned reinvestment programme and a flat gold price,” says CEO Srinivasan Venkatakrishnan.

“We expect a strong finish to the year at our key international operations and continued delivery to tight timelines and budgets on our portfolio-improvement projects.”

The South African operations delivered a 10% production volume improvement from the previous quarter, and a 32% uplift when compared with the first quarter of the year.

The international operations delivered another strong performance with an 11% increase in production compared with the third quarter of 2016, driven by stronger contributions from both mines in Australia, AGA Mineração in Brazil and Siguiri and Geita in Continental Africa.

The outlook for the full year forecasts production of between 3.6 Moz and 3.75 Moz, at an AISC between $1 050/oz and $1 100/oz and capital expenditure between $950 million and $1 050 million.

Feature image credit: AngloGold Ashanti (Mponeng mine)